September 12, 2012

Dismal RIM Sales In US As ‘Meaningful Number’ Of Stores Sell Zero BlackBerrys

by editor

redOrbit Staff & Wire Reports - Your Universe Online

U.S. sales of Research in Motion´s (RIM) BlackBerrys plummeted in August, with some retailers failing to sell even a single device, according to an analyst report.

“We believe that current run rates are roughly one-fifth of those we saw in the U.S. just eight months ago,” said Pacific Crest´s James Faucette in a research note quoted by AllThingsD.

“We found a meaningful number of carrier retail locations which had not sold a single BlackBerry in over a month.”

While RIM´s sales slowdown is not surprising, the extent of the slide has apparently caused carriers to scale back on their inventory.

Faucette said his retail checks indicate that while BlackBerry sales were largely unchanged in August versus July, he detected dramatically lower inventory levels at stores versus a month ago.

In other words, retailers are stocking fewer BlackBerrys, anticipating they may not sell many more of them.

Having less retail shelf space means embattled RIM faces even stronger headwinds as the holiday shopping season approaches, with BlackBerrys already having to compete with new smartphones from Apple, Nokia, Motorola and others.

RIM is relying upon its new BlackBerry 10, which is expected to launch next year, to help turnaround and revitalize its struggling business. The company´s strategy hinges on winning over wireless carriers and consumers with the new device. However, by the time BlackBerry 10 begins shipping, Motorola´s new Droid Razrs, Apple´s latest iPhone and Nokia´s Lumia 920 will have had plenty of time to take center stage with carriers.

“Even assuming that BlackBerry 10 devices roll out on time starting in 2013, we believe the clear evidence of shelf-space pressure our checks have detected does not bode well for the company in the longer term,” said Faucette.

And if RIM fails to win over the carriers, it will be difficult to gain traction with consumers.

Reached for comment about Faucette´s report, a RIM spokesperson said the company remains optimistic about next year's BlackBerry 10 launch.

"We remain focused on the successful launch of BlackBerry 10, scheduled for the first quarter of calendar 2013, and believe the delivery of high quality, fully-featured BlackBerry 10 smartphones will be an attractive offering to our customers."

Although RIM faces clear challenges in the consumer market, there are plenty of companies already heavily invested in the BlackBerry platform, which includes BlackBerry smartphones and BlackBerry Enterprise Server (BES) infrastructure.

But RIM may face challenges with these customers as well. PC World reported on Tuesday that existing BES systems will not be compatible with BlackBerry 10s, meaning “customers will be forced to migrate completely to BB10 all at once–scrapping the existing BES and replacing it–or they´ll have to run a BB10 infrastructure in parallel with the current legacy BES system, and manage them both simultaneously.”

“If the companies that rely on BlackBerry mobile devices have to scrap their BES infrastructure and start over anyway, they´re likely to consider other options like Android, iOS, or Windows Phone.”

RIM is set to report its quarterly results on September 27. Shares of the company´s stock are down more than 50 percent since the beginning of the year.